SECURITIES AND EXCHANGE COMMISSION
Washington, DC
Litigation Release No. 15802 / July 8, 1998
SECURITIES AND EXCHANGE COMMISSION v. LATIN AMERICAN
RESOURCES, INC., JOHN B. LOWY AND HAROLD J. GLASBAND, United
States District Court for the Eastern District of New York,
Civil Action No.CV98 4605 (E.D.N.Y. July 8, 1998)
The Securities and Exchange Commission today filed suit
seeking injunctive relief against Latin American Resources,
Inc. ("LARI"), John B. Lowy, a principal stockholder of LARI
who also served as counsel to the company, and Harold J.
Glasband, Chief Financial Officer and a director of LARI.
The Commission's Complaint alleges that LARI, the corporate
successor of Security Asset Management International, Inc.
("SAMI"), Lowy and Glasband violated the antifraud
provisions of the Securities Exchange Act of 1934 (the
"Exchange Act") by knowingly or recklessly making material
misstatements in an October 1993 Information Statement filed
with the National Association of Securities Dealers, Inc. by
a New York brokerage firm, and a July 1994 Registration
Statement filed by LARI with the Commission.
According to the Complaint, the principal misstatements
contained in these documents were LARI's false claims that
it owned certain Brazilian agricultural plantations,
properties that comprised approximately 95% of LARI's assets
at the time of LARI's false filings. These properties were
purportedly acquired in a series of transactions by SAMI,
and LARI claimed to have acquired the assets as SAMI's
corporate successor. The Complaint alleges that LARI could
not own the plantations under Brazilian law, never owned
them, and dramatically overstated the value of these
Brazilian properties. The Complaint further alleges that
Lowy, who was the president and a director of SAMI, was
chiefly responsible for negotiating the purported Brazilian
transactions, and that Glasband, also a SAMI officer and
director, participated in carrying out the purported
acquisitions. The Complaint alleges that Lowy and Glasband
became aware of information which indicated that there were
infirmities in the purported title to the Brazilian
plantations and material inaccuracies in their valuations.
According to the Complaint, Lowy and Glasband knew, or were
reckless in not knowing, that the Information Statement and
Registration Statement for which they provided information
were materially false and misleading because, among other
things, they misrepresented the ownership of the Brazilian
plantations and materially overstated the value of these
assets, properties said to be worth in excess of $50
million.
Additionally, the Complaint alleges that LARI violated the
Exchange Act's annual and quarterly reporting requirements
and its requirements that issuers maintain proper books and
records and internal accounting controls; that Lowy and
Glasband directly or indirectly falsified, or caused to be
falsified, LARI's books and records; and that Glasband made
false and misleading statements and omitted, or caused
others to omit, to state material facts to LARI's accountant
in connection with the audit of LARI's financial statements
attached to the Form 10-SB.
The Complaint seeks Final Judgments enjoining: (a) LARI
from future violations of Exchange Act Sections 10(b),
13(a), 13(b)(2)(A) and 13(b)(2)(B), as well as Rules 10b-5,
12b-20, 13a-1 and 13a-13 thereunder; (b) Lowy from future
violations of Exchange Act Section 10(b) and Rules 10b-5 and
13b2-1 thereunder; and (c) Glasband from future violations
of Exchange Act Section 10(b) and Rules 10b-5,
13b2-1 and 13b2-2 thereunder. In addition, the Complaint
seeks civil penalties against Lowy and Glasband. With the
filing of the Complaint, LARI and Glasband consented to the
entry of Final Judgments against them permanently
restraining and enjoining them from violating the Exchange
Act provisions described above; Glasband also consented to
the imposition of a $25,000 civil penalty. LARI and
Glasband consented to the entry of the Final Judgments
without admitting or denying the Complaint's allegations.
On August 1, 1994, the Commission suspended trading in
LARI's securities for a ten-day period pursuant to Section
12(k) of the Exchange Act (Exchange Act Release No. 34467).
In an earlier proceeding, LARI's former auditor, Dennis
Klein, consented to a Commission Order denying him the
privilege of practicing before the Commission as an
accountant (In the Matter of Dennis Klein, C.P.A., Exchange
Act Release No. 38844, Accounting and Auditing Enforcement
Release No. 937, July 17, 1997).